INDIA PISTONS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner is a company engaged in the business of manufacture and sale of motor vehicle parts and accessories, falling under chapter No. 84. 09 of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Central Excise Act ). THE petitioner is required to maintain accounts of the goods manufactured by it for the purpose of levy and assessment of excise duty. During the years 1980, 1981 and 1982, the annual stock taking was taken of the goods manufactured and assessed and in the annual stock taking account, the Excise Department authorities found that there were alleged shortages in certain goods and excess in certain goods. According to the assessees, the deficiency in some goods and the excess in certain other goods were found, because the assessee is manufacturing large number of similar liking goods such as piston rings, gudgeon pins etc. and the variation in the dimension is so small that one could mistake one with the other. THE authorities invoked Rule 223a of the Central Excise Rules, 1944 and called upon the assessee to explain the shortages and the assessee was given an opportunity to show cause why penalty should also be not imposed on the assessee. THE case of the assessee before the authorities was that the show cause notice has been issued after the expiry of the period specified under Section 11a of the central Excise Act and it was pleaded that the shortages, if any, can be set off against the excess and there is no justification for the departmental authorities to demand excise duty on the alleged shortage alone. THE Assistant Collector of central Excise overruled the objections preferred by the assessee and confirmed the demand of Rs. 1, 60, 623. 12 in respect of shortgages under Rule 223a of the central Excise Rules, 1944 and directed the goods found in excess to be entered into R. G. I. account. THE Assistant Collector also imposed a penalty of Rs. 2, 000/ -. THE petitioner filed an appeal before the Collector of Central Excise (Appeals ). THE first appellate authority held that the Assistant Collector ought to have adjusted the shortages against the excess and in this view of the matter, he cancelled the penalty and remitted the matter to the Assistant collector for fresh consideration. THE Collector of Central Excise in exercise of the powers under Section 35b (2) of the Central Excise Act directed the superintendent of Central Excise to prefer an appeal to the Customs, Excise and gold (Control) Appellate Tribunal (hereinafter referred to as "appellate tribunal"), against the order passed by the Collector of Central Excise (Appeals), Madras in the case of assessee company. Consequently, an appeal was preferred before the Appellate Tribunal by the Collector of Central Excise, madras. THE assessee preferred a cross-objection on 14-2-1985 before the appellate Tribunal on the ground that consequent to the amendment of Section 35 and insertion of Section 35ee by the Finance Act, 1984, the subject matter cannot be dealt with by the Appellate Tribunal and hence, the appeal was liable to be rejected in limin e. THE Appellate Tribunal by an order dated 22-1-1986 held that the proper forum competent to entertain the matter is only the central Government in terms of Section 35ee of the Act. THE Appellate Trubunal also held that since appeals were pending in the registry of the Tribunal for a considerable time, the appeal papers should be transmitted to the revisional authority via, the Government of India for being dealt with in accordance with law. THE assessee company challenged the order of the Tribunal remitting the matter to the Central Government on the ground that when once the Appellate tribunal has found that it had no jurisdiction to hear and decide the appeal, the only order that could be passed was either to reject or dismiss the appeal. Hence, it was contended that the direction of the Appellate Tribunal directing the transmission of the papers to the Government of India was improper and liable to be quashed.

(2.) THIS Court by an order in W. P. No. 5698 of 1986 upheld the contentions of the assessee company and quashed the above part of the order directing the transmission of the appeal papers to the Central Government. THIS court therefore, held that the Central Government cannot hear the matter and directed the Central Government to return the papers to the Appellate Tribunal for the purpose of returning the same to the appellant before the Tribunal to present the same before the forum having jurisdiction, if so advised, and consequently, the Central Government transferred the papers to the Appellate tribunal. On 9-1-1987, the Central Government, in exercise of powers under section 35ee (4) of the Central Excises and Salt Act, 1944, issued the show cause notice to the assessee company on the ground that the order of the collector (Appeals) dated 3-1-1985 was found to be illegal, improper and incorrect for the reasons set out in the notice. The Government therefore, prima facie felt that the impugned order-in-appeal called for revision and the assessee company was given a show cause notice to submit its reply as to why the order passed by the Collector of Central Excise should not be revised. The assessee company has challenged the show cause notice in the present writ proceedings.

(3.) THE next contention that was raised by him is that the petitioner has been deprived of valuable right of limitation and hence, the respondent has no jurisdiction to issue the interim show cause notice. As already seen, Section 35 EE (4) of the Act does not prescribe any period of limitation for the Central Government to exercise the suo motu power to revision to annul or modify an order referred to under Section 35b (1) of the central Excise Act. I have already taken a view that there is no period of limitation prescribed under Section 35ee (4) of the Act and hence, it is not possible to accept the contention of the learned Counsel for the petitioner that it is deprived of the valuable right of limitation. Secondly, it must be remembered that the power under Section 35ee (4) is a suo motu power of revision, and the appellate power under Section 35b and the revisional power under Section 35ee operate in different fields and hence, it is not possible to accept the contention of the learned Counsel for the petitioner that it has been deprived of valuable right of limitation. Further, as held by this Court in Salem Provident Fund Society v. Commr. of Income Tax 1961 (42) ITR 547 wherein this Court has taken a view that the real question in a given case is whether the statutory requirements are statisfied and if in a given case the requirements are satisfied, the authority can have recourse to either of the powers and the mere overlapping of the power is not a bar to recourse to either of the sections at the choice of the assessing authority. Hence, I am of the view that the availability of power to the Central Government under Section 35ee (1) of the Central Excise Act, is not a bar to exercise the suo motu jurisdiction vested in the Central Government under Section 35ee (4) of the Act. THE only question that has to be asked is whether the statutory requirements of section 35ee (4) of the Central Excise Act are statisfied for the initiation of the suo motu power of revision, the statutory conditions are satisfied, it is not open to this Court to prevent the revisional authority from exercising the statutory power conferred on the Central Government under Section 35ee (4) of the Act by placing reliance on some other provision of Central Excise Act or other provisions of other Acts. Hence, I am not able to accept the contention of the learned Counsel for the petitioner that, it has been deprived of valuable plea of limitation and the Central Government has no power to exercise the power of revision.